TaxTMI 
TaxTMI 
2025 (12) TMI 774
X X X X Extracts X X X X
X X X X Extracts X X X X
.... classification of the proposed items of import namely Rice beer. The applicant submitted in their application as under: 1.2 The applicant is an importer of Beer which it imports from its supplier M/s Woorisool Co. Limited, #29, DAEBOGANSEON-RO, JOJONG-MYEON, GAPYEONG-GUN, GYEONGGI-DO-, KOREA through Inland Container Depot, Tughlaqabad, New Delhi. The movement and ultimate disposal of the goods imported by the applicant are controlled by Customs Bond Section for which the applicant has executed a Tripple Duty Bond in terms of the provisions of Section 59 of the Customs Act, 1962. All the goods imported by the applicant are supplied to its various customers. However, presently all the goods are supplied to M/s JB Beer, 13, Model Village, Naharlangun, District Papumpare, Arunanchal Pradesh, 791110. 1.3 The applicant initially filed a Bill of Entry No. 3660394 dated 22.04.2021 for clearance of Beer (PONAA MAKKOLLI STRONG RICE BEER (SPARKLING RICE MAKGEOLLI PONAA) classifying it under CTH 22030000 chargeable to BCD @ 100% + Social Welfare Surcharge @ 10%. The goods were assessed as per our declared classification. However, for subsequent consignments, the Customs Appraising Gr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ewing process. * Yeast: Specific yeast strains are selected for their ability to ferment the sugars in the rice wort and produce the desired alcohol and flavor profile. 2. Mashing: * Mashing: The rice is mixed with water and heated to a specific temperature range to gelatinize the starch and activate enzymes, which convert the starch into fermentable sugars (wort). * Lautering: The liquid (wort) is separated from the spent grains through a process called lautering, which involves filtering the wort to clarify it. 3. Brewing: * Boiling: The wort is boiled to sterilize it, stop enzymatic activity, and allow for the addition of hops (if desired) for bitterness and aroma. * Wort Cooling: The boiled wort is cooled to a temperature suitable for fermentation. 4. Fermentation: * Fermentation: The cooled wort is transferred to a fermentation vessel, where yeast is added. The yeast consumes the sugars in the wort, producing alcohol, carbon dioxide, and other flavor compounds. * Maturation: After fermentation, the beer is typically aged (or m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orter or wheat, and may or may not be pasteurized. It is served from a cask or keg. 1 [4.2 (1) Craft beer is made in a micro-brewery/ pub-brewery, and may be aromatized with suitable food ingredients. It may or may not be filtered and pasteurized, and may be sold in casks, kegs, bottles, or cans.] 4.3 In addition to the general requirement specified in Part 1 and the requirements specified in Table-3, beer shall also confirm to the following requirements: i) It shall be clear (except wheat beer) with characteristic colour, taste, bouquet and form of its type. It shall be bottled or canned, and pasteurized or filter sterilized, except draught beer which may or may not be pasteurized or filter sterilized. ii) It shall be free from coliforms and other pathogenic microorganisms. 1.9 Going by the contents of 'Beer' in Food Safety and Standards (Alcoholic Beverages) Regulations, 2018, it is also evident that the product imported by the applicant is Beer in which the dominant ingredient is Rice which is fermented, lautered, brewed, matured, filtered/pasteurized and finally carbonated. 1.10 The applicant further submits that the Beer import....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther, classification of its product under CTH 22060000 is also ruled out for the reason that it is an alcoholic product having Ethyl Alcohol to the extent of 7.98% - Reference Analysis Report issued by overseas supplier enclosed as ANNEXURE 'G'. The applicant submits that since the product imported by the it is manufactured using the process of malting of Rice, it is more appropriately classifiable under CTH 22030000 and not under CTH 22060000 as is being assessed by the Respondent Department. 1.15. In view of the above, the applicant seeks ruling from this Hon'ble Authority seeking classification of Beer (PONAA MAKKOLLI STRONG RICE BEER (SPARKLING RICE MAKGEOLLI PONAA) under CTH 22030000. 2. Comments of The Port Commissionerate :- 2.1 The comments in respect of this application from the concerned port Commissionerate i.e. ICD(Import) Tughlakabad, New Delhi have been received vide F.No. GEN/AG/MISC/169/2025-O/o Pr Commr-Cus-ICD-TKD dated 03.07.2025 is as below :- 2.2 The applicant's claim that initial assessments under CTH 22030000 create a binding precedent is legally untenable as classification is governed by the General Rules for Interpretation (GRI) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssification; the decisive factor is the presence of malt, which is absent here. Thus, their product aligns compositionally and procedurally with sake or rice wine under Heading 2206, as explicitly noted in the Explanatory Notes, making classification under 2203 legally unsustainable. 2.5 Rebuttal to Paragraph 6: The applicant's reliance on Export Permits issued by State Excise Authorities for movement to Arunachal Pradesh is irrelevant for customs classification. Classification under the Customs Tariff Act, 1975 is determined solely by the General Rules for Interpretation, Chapter and Section Notes, and HSN Explanatory Notes, not by state excise permits, which serve only regulatory purposes. The use of the term "beer" in such permits does not establish tariff classification, especially when the product lacks malted ingredients required under Heading 2203. Therefore, citing these permits to justify classification under 2203 is legally untenable. 2.6 Rebuttal to Paragraph 7 of the Applicant's Submission: The applicant's reliance on the Transit Pass issued by Assam State Excise is irrelevant for customs classification. Such passes serve purely administrative pu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ect since 2206 applies both to pure fermented beverages and to mixtures with non-alcoholic drinks. Further, the product's ABV of 7.98% does not exclude it, as Heading 2206 includes all fermented beverages exceeding 0.5% alcohol by volume. ii. Malting is a specific biological process involving three essential steps: (i) Steeping, where grains (typically barley) are soaked in water to increase moisture content and initiate germination; (ii) Germination, where the grain begins sprouting, activating endogenous enzymes- fermentable sugars; and (ii) Kilning, where germination is halted by drying with hot air to preserve these activated enzymes and impart primarily amylases that convert stored starches into simpler characteristic malt flavours. iii. In contrast, the applicant's process does not involve any germination of rice grains. Instead, it uses Koji, which is steamed rice inoculated with Aspergillus oryzae mold. The Koji mold produces external enzymes (amylases and proteases) that break down rice starches into sugars. This saccharification is entirely external enzymatic hydrolysis, unlike malting where the grain itself produces the enzymes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or Classification under CTH 22060000 In addition to the factual, compositional, and process-based reasons elaborated earlier, the following broader legal and interpretative grounds also decisively support the classification of the imported product under CTH 22060000 1. Heading 2203 is a narrow and specific entry restricted to "Beer made from malt." The structure of Chapter 22 of the Customs Tariff is inherently hierarchical, ingredient-specific, and governed by the precise biochemical nature of the substrate used in producing alcoholic beverages. Heading 2203 exclusively covers products defined legally and technically as "beer made from malt." This is not merely a generic descriptor but a specific tariff classification rooted in the Customs Tariff Act, 1975, and aligned with the Harmonized System of Nomenclature (HSN) as adopted by the World Customs Organization (WCO). a) According to Encyclopaedia Britannica, "Malting is the limited germination of cereal grains, usually barley, to modify the grain's natural food substances for the production of beer and other foods. The principal changes are the conversion of reserve starch into sugars and the mod....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tioned in Heading 2206 are not exhaustive but illustrative. The heading covers "other fermented beverages broadly and is a residual entry for all fermented drinks not falling within 2203 (beer from malt), 2204 (grape wine), or 2205 (vermouth). Thus, fermented alcoholic beverages made from non-grape, non-malted cereals like rice clearly fall within this residual category. 4 Application of General Rules for Interpretation (GRI) Goods merit classification under CTH 2206 Application of the General Rules for Interpretation (GRI) confirms classification under CTH 22060000. Under GRI 1, classification is based strictly on heading terms and notes; since Heading 2203 is limited to "beer made from malt" and the applicant's product uses non-malted rice with Koji, it cannot fall under 2203. GRI 3(a) prefers the more specific description; here, 2206 specifically covers non-malt fermented beverages like Makgeolli. Under GRI 3(b), essential character lies in rice fermentation, not malt, further supporting 2206. Even under GRI 4, 2206 remains the heading most akin to fermented rice beverages. Finally, GRI 6 mandates subheading classification to follow heading-level logic, mak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uring process, and common understanding of the product, aligning it squarely with the definition and spirit of beer. ADDITIONAL GROUNDS FOR CLASSIFICATION 4.3 Koji as Malted Rice and its Functional Equivalence to Malt: We are providing a sample can of our product, Ponaa Makkoli, which contains the following ingredients- rice, koji, carbon dioxide, yeast, and pure water. The preparation of Ponaa Makkoli fundamentally relies on "koji," which is, malted rice. Koji is produced by inoculating steamed rice with Aspergillus oryzae mold, leading to the enzymatic conversion of starches into fermentable sugars. This process functionally parallels the malting of barley or other grains in traditional beer brewing, where enzymes are developed to break down starches. The Explanatory Notes to the Harmonized System, while not exhaustive, recognize that "beer" can be made from various malted cereals. The use of koji, a malted grain product, for saccharification and fermentation in Ponaa Makkoli directly fulfills the functional requirement of malt in beer production, thereby bringing the beverage within the ambit of HS Code 2203. The primary role of koji is to facilitate the conversion of comp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an with higher-alcohol rice wines or sake, provides strong objective evidence supporting its classification under HS Code 2203. The lower alcohol content is a direct consequence of its brewing process, which is designed to produce a beverage with characteristics more akin to beer. 4.6 Specificity of HS Code 2203 over 2206: According to the General Interpretative Rules (GIR) for the interpretation of the Harmonized System, specifically GIR 3(a), the heading which provides the most specific description shall be preferred to headings providing a more general description. HS Code 2203 specifically describes "Beer made from malt," which, as argued above, encompasses Ponaa Makkoli due to the functional equivalence of koji to malt and its overall characteristics. Conversely, HS Code 2206, "Other fermented beverages (for example, cider, perry, mead); mixtures of fermented beverages and mixtures of non-alcoholic beverages not elsewhere specified or included," is a residual heading. Given that Ponaa Makkoli possesses distinct characteristics aligning with beer, the specific heading 2203 should take precedence over the general, catch-all heading 2206. (Copy of General Interpretative Rules ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al sake, reinforcing its classification as a type of beer. 4.10 International Classification Practices and Harmonized System Interpretation: The Harmonized System aims for uniformity in classification across international borders. A broad and pragmatic interpretation of "beer made from malt" is consistent with the evolving landscape of fermented beverages globally. Many countries recognize grain-based fermented beverages, even those not exclusively from barley malt, as types of beer or beer-like products. Restricting "beer" solely to barley-malt-based products would be an anachronistic interpretation that fails to account for diverse brewing traditions and innovations, thereby undermining the spirit of the Harmonized System. Legislative Intent and Revenue Neutrality: The legislative intent behind the Customs Tariff Act, 1975 is to classify goods based on their essential character and common understanding. Classifying Ponaa Makkoli under HS 2203 aligns with this intent, recognizing it as a grain-based fermented beverage with characteristics akin to beer. Furthermore, an appropriate classification should ideally be revenue-neutral or consistent with the broader economic impact ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt's product is made from rice fermented with koji and yeast, without any malting of cereals. It is stated that Koji fermentation involves the inoculation of steamed rice with mold (Aspergillus oryzae) which produces enzymes externally to convert starch to sugars-a process fundamentally different from malting, which is an internal germination process. The jurisdictional Commissionerate has further stated that Heading 2206 00 00 specifically covers "Other fermented beverages (for example, cider, perry, mead); mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified or included". The Harmonized System Explanatory Notes (HSN) to Heading 22.06 explicitly include rice-based fermented beverages such as sake and makgeolli. Since the product under consideration is a Korean makgeolli type beverage, the Commissionerate has concluded that classification under Heading 2206 00 00 is correct in law and fact. 5.4 It is settled principle of law that the classification of any good under Customs Tariff Act, 1975 is governed by the General Rules for the Interpretation of the Import Tariff. Further, Rule 1 of GRI stipulates that "classification shall be determined ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de from malt, the alcoholic strength of which by volume has been reduced to 0.5% vol or less (heading 22.02). (c) Medicaments of heading 30.03 or 30.04." 5.6 The HSN Explanatory notes to Tariff Heading 2206 are reproduced below :- "This heading covers all fermented beverages other than those in headings 22.03 to 22.05. It includes inter alia (1) Cider, an alcoholic beverage obtained by fermenting the juice of apples. (2) Perry, a fermented beverage somewhat similar to cider made with the juice of pears. (3) Mead, a beverage prepared by fermenting a solution of honey in water. (The heading includes hydromel vineur mead containing added wine, aromatics and other substances.) (4) Raisin wine. (5) Wines obtained by the fermentation of fruit or nut juices, other than juice of fresh grapes (fig, date or berry wines), or of vegetable juices, with an alcoholic strength by volume exceeding 0.5% vol. (6) "Malton", a fermented beverage prepared from malt extract and wine lees (7) Spruce, a beverage made from leaves or small branches of the spruce fir or from spruce essence (8) Saké or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No malted grain or malt extract is present. The manufacturing process described by the applicant also does not involve the essential steps of steeping, germination and kilning. Instead, koji acts as a mold-based enzymatic starter. Thus, the product does not satisfy the primary condition of Heading 22.03, i.e. it must be made from malt. 5.10 I find that koji cannot be equated with malt. Malting is a biological germination process in which enzymes develop within the grain itself, whereas koji is produced by inoculating steamed rice with mold that produces enzymes externally. The two processes are biochemically distinct. The use of koji in East Asian fermentation traditions such as sake or makgeolli is not analogous to malting in the brewing of beer. Therefore, the contention of the applicant that koji is "malted rice" is not acceptable. 5.11 I further observe that the applicant's reliance on the Food Safety and Standards Regulations and the State Excise labelling of the product as "beer" is misplaced. These instruments operate in different statutory domains concerned with food safety and excise control and cannot determine tariff classification under the Customs Tariff Act,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the appropriate residual heading, correctly covers the goods. By application of Rule 6, classification at subheading level follows the same principle, leading to subheading 2206 00 00. 5.17 In view of the above discussion, I find that the product "PONAA MAKKOLLI STRONG RICE BEER (SPARKLING RICE MAKGEOLLI PONAA)" is not "beer made from malt" within the meaning of Heading 22.03 of the First Schedule to the Customs Tariff Act, 1975. It is a fermented alcoholic beverage made from rice using koji, which is specifically covered by Heading 22.06. Accordingly, I hold that the impugned goods are appropriately classifiable under Customs Tariff Heading 2206 00 00 as Other fermented beverages (for example, cider, perry, mead); mixtures of fermented beverages and non-alcoholic beverages, not elsewhere specified or included. 6. I, rule accordingly. ============= Document 1 5:23 PM Travel Pass 5 Dinle 24-APR-23 13.02.29 PM TTF2013042519994 HINOPU OVERSEAS, KIJASRA NO, 47/16, VI LAGE MAMAYPOR, GAHJAY GANDHI TRANSPORT NAGAR, SANJAY GANDINI TRANSPORT NAGAR, NEAR DELHI DHARAM KANTA DEL.HI 1. Name & achtryss of the applicant Particulars of consignment (a) Invoice Number a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o EX-293/BRL/20-21 Under rule 245 of the Arunachal Pradesh Excise Rules 1994, the following Brand and Labels of IMFL/BEER is/are hereby registered for marketing in the state of Arunachal Pradesh for (01) one year, subject to the following terms and conditions :- Si No Name of Brand / Label Size of Bottles/Packing (ml.) and Ex- Bond Price Name of Distillery/Source of Supply 1. Ponas Makkoli Strong Rice Beer. 350ml R$.4200.00 M/s Hingpu Over Seas, 906 I.D Centre, Sohna Road, Sect-47. Gurgaon-122001, Haryana. 2. Ponaa Makkoli Premium Rice Beer. 350ml. Rs.4200.00 -do The certificate of Registration shall conform to the following terms and conditions :- 01 "FOR SALE IN ARUNACHAL PRADESH" must be printed on the labels of all Liquor brands 02 Maximum Retail price of the product shall be calculated as per govt guide fine vide order No.EX-108/96, dated. 31st May, 2006 and it must printed on the labels 03. The Food Safety and Standard Authority of India (FSSAI) logo and license number of the Brand of the owner shall also be printed on the label as per notification No 41/15015/30/20110ated 07/06/13 of Food Safety and Standard Authority of India, New Delhi 04. ....